Pretoria - Media reports that Denel may have entered into a joint venture to form a company that will operate from a jurisdiction in Asia have been noted by National Treasury.
“National Treasury is currently engaging directly with Denel on the matter,” said Treasury in a statement on Wednesday.
Treasury stated that state-owned entities are required to obtain approval from the Minister of Finance and/or Minister of Public Enterprises before establishing companies, in terms of the Public Finance Management Act (PFMA).
In terms of the conditions attached to the R1.85 billion in guarantees that have been provided by government to Denel, any significant transactions that Denel enters into require the approval of both the Ministers of Finance and Public Enterprises, said Treasury.
It said Denel submitted its application in terms of Section 54(2) on 10 December 2015.
“However, prior to Denel submitting its application, National Treasury had outlined the information that would be required to comprehensively assess the application. The Minister of Finance is still considering this application, and further information has been requested from Denel.”
President Jacob Zuma’s 11 December 2015 media statement noted that there is no state-owned entity “that can dictate to government how it should be assisted. In addition, no chairperson of a board of a state-owned company has the power to tell a government department to which the entity reports, how to support or lead them”.
“The board of a public entity commits an act of financial misconduct where it wilfully or negligently fails to comply with the PFMA. Treasury regulations specify that such allegations must be investigated by the executive authority and, if confirmed, appropriate disciplinary proceedings must be initiated,” said Treasury. - SAnews.gov.za
